QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: The COVID-19 pandemic and recent macroeconomic events have resulted in negative impacts on global economies and financial markets, which may increase our foreign currency exchange risk and interest rate risk.
+Added: Recent macroeconomic events have resulted in negative impacts on global economies and financial markets, which may increase our foreign currency exchange risk and interest rate risk.
For further discussion of the potential impacts of these events on our business, financial condition, and operating results, see “Risk Factors” included in Part II, Item 1A of this report.
2 unchanged sentences
As a result, our operating results and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
−Removed: As of October 31, 2022, our most significant currency exposures were the euro, British pound, Canadian dollar, and Australian dollar.
+Added: As of April 30, 2023, our most significant currency exposures were the euro, British pound, Canadian dollar, and Australian dollar.
Due to our exposure to market risks that may result from changes in foreign currency exchange rates, we enter into foreign currency derivative hedging transactions to mitigate these risks.
1 unchanged sentence
Interest Rate Risk on our Investments
−Removed: We had cash, cash equivalents, and marketable securities totaling $5.5 billion and $3.6 billion as of October 31, 2022, and January 31, 2022, respectively.
+Added: We had cash, cash equivalents, and marketable securities totaling $6.3 billion and $6.1 billion as of April 30, 2023, and January 31, 2023, respectively.
Cash equivalents and marketable securities were invested primarily in U.S.
6 unchanged sentences
Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.
−Removed: Due in part to these factors, our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates.
−Removed: Our debt securities are classified as “available-for-sale.” When the fair value of the security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the impaired security, is recognized on the Condensed Consolidated Statements of Operations.
−Removed: An immediate increase of 100 basis points in interest rates would have resulted in a $20 million and $11 million market value reduction in our investment portfolio as of October 31, 2022, and January 31, 2022, respectively.
+Added: Due in part to these factors, our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we sell securities that decline in market value due to changes in interest rates.
+Added: Further, since our debt securities are classified as “available-for-sale,” if the fair value of the security declines below its amortized cost basis, then any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the impaired security, is recognized on the Condensed Consolidated Statements of Operations.
+Added: An immediate increase or decrease of 100 basis points in interest rates would have resulted in a $38 million market value reduction or increase in our investment portfolio as of April 30, 2023.
+Added: An immediate increase or decrease of 100 basis points in interest rates would have resulted in a $29 million market value reduction or increase in our investment portfolio as of January 31, 2023.
This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur.
3 unchanged sentences
Generally, the fair values of the Senior Notes will increase as interest rates fall and decrease as interest rates rise.
−Removed: Borrowings under our 2022 Credit Agreement will bear interest, at our option, at a base rate plus a margin of 0.000% to 0.500% or a SOFR rate plus 10 basis points, plus a margin of 0.750% to 1.500%, with such margin being determined based on our consolidated leverage ratio or debt rating.
+Added: Borrowings under our 2022 Credit Agreement will bear interest, at our option, at a base rate plus a margin of 0.000% to 0.500% or a SOFR plus 10 basis points, plus a margin of 0.750% to 1.500%, with such margin being determined based on our consolidated leverage ratio or debt rating.
Because the interest rates applicable to borrowings under the 2022 Credit Agreement are variable, we are exposed to market risk from changes in the underlying index rates, which affect our cost of borrowing.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.